Definitions for utilization
use, usage, utilization, utilisation, employment, exercise(noun)
the act of using
"he warned against the use of narcotic drugs"; "skilled in the utilization of computers"
the state of having been made use of
"the rate of utilization"
the act of utilizing, or the state of being utilized
In equipment and tool rental companies, utilization is the primary method by which asset performance is measured and business success determined. In basic terms it is a measure of the actual revenue earned by assets against the potential revenue they could have earned. Rental utilization is divided into a number of different calculations, and not all companies work precisely the same way. In general terms however there are 2 key calculations: the physical utilization on the asset, which is measured based on the number of available days for rental against the number of days actually rented., and the financial utilization on the asset which is measured as the rental revenue achieved over a period of time against the potential revenue that could have been achieved based on a target or standard, non-discounted rate. Physical utilization is also sometimes referred to as spot utilization, where a rental company looks at its current utilization of assets based on a single moment in time.
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